Donor
Under the Income Tax Act, a donor can be an individual or a corporation. An individual can claim a tax credit for the eligible amount of gifts made to qualified donees. A corporation can deduct the eligible amount of gifts made to qualified donees from its taxable income. |
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Donor-Advised Fund (DAF)
A Donor-Advised Fund is a separate fund established within a charity for which the donor receives an immediate tax receipt but retains the right to advise the charity on how the money in the fund and the income generated will be spent. At the time the fund is established, the donor can name the fund, the purpose of the fund and the charitable causes to be supported. Donor-advised funds are generally established to fund an endowment and are characterized as a 10-year gift and/or a gift of enduring property. |
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Donation Date
The date the gift is made. The donation date may not be the date of physical delivery, but the date that beneficial interest is transferred to the charity is considered the date the gift is made, or the donation date. |
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Donation Receipts
Official tax receipts from registered charities are issued on the eligible amount of the gift donated, based on the fair market value as of the donation date. |
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Endowment
Funds or property donated as a permanent provision for support, or source of income. The money in the endowment can be undesignated, and the income directed each year by the leadership of the fund. In some cases, a donor will restrict the use of the endowment income, such as in education settings (an endowed chair or scholarship). |
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Fiduciary Duty
The legal responsibility to act sensibly on behalf of another. |
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Gift
In most cases, a gift is a voluntary transfer of property without valuable consideration to the donor. |
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Gift-in-Kind
A gift of property other than cash, including: •Securities such as stocks, bonds, mutual fund trust units, segregated fund trust units •Artwork, equipment, cultural and ecological property etc. A charity can issue a tax receipt for the fair market value of a gift on the date it was donated. For donations of securities-in-kind, the donation valuation of a share of a corporation that is listed on a designated stock exchange is generally determined as the closing price on the donation date. |
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Gift of Insurance
A charity can benefit from gifts of insurance policies in many ways. Often, a gift of an insurance policy permits a donor to make a large donation at a relatively small cost to the donor. For example, a donor can own a policy and name the charity as beneficiary, so the estate will receive the tax credit. Alternatively a donor can transfer an existing policy to a charity; and the charity will issue a receipt for the value of the policy .For additional information on how insurance policies may be used for charitable donations, please consult a professional insurance broker. |
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Gift: Ordinary or One-Time
All donations made to a registered charity are ordinary or one-time gifts unless given with a restriction or direction by the donor to be held for a specific purpose and/or as gifts of enduring property. Eighty per cent of an ordinary or one-time donation must be spent by the charity by the end of the following year. |
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Gifts by Will (Bequest)
A frequent type of donation is a gift by will, or "testamentary" gift. The donor states in a will that on death, property is to be given to a specified charity or a charity to be chosen by the executor(s). The tax credit for a gift by will is available to offset 100% of income for the year of death and can be carried back and used to reduce taxes payable in the prior year. In general, the value of the gift, for purposes of the charitable donation tax credit, is the value immediately before death and not when the property is subsequently received by the charity. |
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Grant
Income transferred from a foundation to a registered charity or other qualified donee. Annual grants from foundations are calculated based on the disbursement quota calculation established by CRA for gifts of enduring property. |
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Pledge
A pledge is a promise to make a gift. When a donor honours a pledge by making a voluntary transfer of property a donation receipt can be issued. |
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Qualified Donee
Qualified donees are organizations that can, under the Income Tax Act, issue official tax receipts for gifts they receive from individuals and corporations. A registered charity can make gifts only to other qualified donees. These include registered charities, registered Canadian amateur athletic associations, registered national art service organizations, housing corporations, municipalities in Canada, the United Nations, the Government of Canada, and a province or territory. |
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Registered Charity
There are three designations for registered charities: a charitable organization, a private foundation and a public foundation. Registered charities receive a charitable registration number, can issue official tax receipts and are exempt from tax. |
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Revocation
Revocation is the procedure by which a charity loses its registration number and all advantages of being registered as a charity. A charity's registration maybe revoked voluntarily or involuntarily. |
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10-Year Gift
A 10-year gift is a donation that is made subject to a donor's written direction that the gift be held by a registered charity for at least 10 years. Under the Income Tax Act, a 10-year gift is a gift of enduring property. |
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